Financia; Statements: Notes 17-30

Date

Note 17: Receipts to the Consolidated Revenue Fund

1997-98
Estimate
$


1997-98
Actual
$

1996-97
Actual
$

Receipts
Advances to the
Australian Capital Territory

Interest

 

3,321,000


 

3,320,582

3,320,582

Advances to the States under the
Housing Agreements

Interest
Principal

 

145,700,000

70,400,000


 

145,687,049

70,432,056

148,441,133
67,677,972

Advances to the
Northern Territory for Housing

Interest
Principal

 

1,606,000

377,000


 

1,608,044

374,878

1,624,187
358,735

Advances to the States under the
Housing Assistance Act 1973

Interest

Principal

 

193,000

96,000


 

203,438

96,022

207,131
92,329

Advances to the States under the States (Works and Housing Assistance) Acts

Interest

Principal

 

94,400,000

17,000,000


 

94,395,361

17,080,548

95,130,887
16,345,022

Advances to the States under the
War Service Lands Settlements Acts

Principal

 

736,000


 

736,060

709,456

Australian National Railways Commission

Debt repayment

700,000,000


460,812,450

-

Banking Act 1959 — Unclaimed moneys

15,000,000


16,803,384

20,751,331

Bank dividends

1,200,000,000


1,700,000,000

2,135,807,027

Borrowing levy and guarantee
charge on borrowings by
Commonwealth Government Enterprises

 

7,500,000


 

5,256,153

8,383,867

Commonwealth Bank — Proceeds of sale

-


-

3,804,609,537

Commonwealth Development Bank
— Proceeds of sale

-


-

12,500,000

Fiscal contributions by State Government

-


406,592,890

395,225,418

Housing Loans Insurance Corporation —

Dividend and special annual payment

Payment of reserves to the
Consolidated Revenue Fund
Premiums from old book stock
Recoveries from old book stock

3,000,000

6,000,000
-
-


6,728,000

251,672,927

8,561,778

1,737,339

5,752,000

-

-

-

Interest paid by States and the
Northern Territory on other loans

388,385,000


566,898,890

469,289,046

International Monetary Fund

Maintenance of value adjustment
Remuneration


-

10,681,000


-

2,915,156

448,990,968
10,922,470

Loan management expenses —
recoveries from the States
and the Northern Territory

 

90,000


 

81,570

111,069

Loans Securities Amendment Act 1988 —
receipts from swap counterparties

4,950,000,000


3,277,578,379

5,655,841,179

Loan PNG — Interest
— Principal

3,582,000

69,400,000


3,578,426

69,400,000

5,760,200

-

Regulation of companies and securities

308,600,000


326,015,066

297,918,357

Royal Australian Mint and Coinage Trust
Account — moneys in excess of
requirements

 

64,000,000


 

49,000,000

55,000,000

Seigniorage payments - Gold Corporation

750,000


818,806

807,643

Miscellaneous

105,000


125,827

161,592

Section 31 of the Financial Management and Accountability Act 1997 — to be credited to Running Costs — Division 670

 

911,000


 

928,913

1,380,686

Total receipts

8,061,833,000


7,489,439,992

13,663,119,824

Note 18: Expenditure from Special Appropriations

1997-98
Budget
$


1997-98
Actual
$

1996-97
Actual
$

Expenditure from Special Appropriations:
Airports (Transitional) Act 1996 — former
debts of the Federal Airports Corporation
— Interest

 

48,800,000


 

51,133,618


4,950,000

Airports (Transitional) Act 1996 — former
debts of the Federal Airports Corporation
— Loan Management Expenses

 


-


 

-


8,185

Commonwealth Inscribed Stock Act 1911,
Loans Securities Act 1919, Loans Redemption & Conversion Act 1921

 

9,183,550,000


 

15,141,784,855


9,767,391,569

Loans Securities Amendment Act 1988
payments to swap counterparties

4,775,000,000


3,118,861,511


4,834,623,221

Financial Agreement Act 1994
Assistance for Debt Redemption

62,300,000


62,265,944


220,358,956

Loans Redemption and
Conversion Act 1921

5,000


-


-

Moomba — Sydney Pipeline
System Sale Act 1994

18,945,000


18,936,779


16,177,481

Financial Agreement Act 1994 —
Commonwealth contribution to Debt
Retirement Reserve Trust Account on
State and Northern Territory Debt

 

 

10,410,000


 

 

10,395,310


12,583,805

Interest on Debt Retirement
Reserve Trust Account Balances

829,000


269,233


633,828

Payment of Tax Receipt (Victoria) Act 1996

-


-


555,618,065

States Grants (General Purposes)
Ac
t 1993 and 1994

16,168,875,000


21,783,582,539


16,174,138,968

Asian Development Bank
(Additional Subscription) Act 1995

2,195,000


2,424,381


2,169,883

Banking Act 1959

15,000,000


10,006,817


10,849,389

Commonwealth Inscribed Stock Act 1911,
Treasury Bills Act 1914
— Payment of
Special Bond premiums on redemption

 

5,000


 

149


408

European Bank for Reconstruction
and Development Act 1990

-


-


1,535,539

International Monetary
Agreements Act 1947

39,392,000


726,603,211


16,348,091

Proposed Multilateral Investment
Guarantee Agency Act 1996

-


-


-

Qantas Sale Act 1992 — Qantas
Debt Servicing

61,770,000


70,188,194


62,971,914

Total Expenditure from Special
Appropriations

30,378,077,000


40,996,452,541


31,680,359,302

Note 19: Expenditure from Annual Appropriations

Ordinary Annual Services of Government Appropriation Act

1997-98
Budget
Estimates

Act No 1
$

1997-98
Additional Appropriations

Act No 3
$

1997-98
Advance to the Minister for Finance
$

1997-98
Total Appropriations
$


1997-98
Actual Expenditure
$

1996-97

Actual Expenditure


$

Division 670 - Administrative
1 Running Costs

50,494,913

3,904,000


-

54,398,913


50,555,856

49,572,516

2 Other Services

01. Compensation and legal expenses

233,000

467,000


-

700,000


112,748

129,915

02. Loan management expenses

3,390,000


-


-

3,390,000


2,581,443

3,711,110

03. Overseas bond issues – Payments in respect of lapsed coupons

10,000

10,000


-

20,000


6,583

924

04. Australian National Railways Commission – Debt acquisition

1,035,100,000

174,000,000



-

1,209,100,000


923,812,450


-

05. Proposed new Housing Loans Insurance Company – Payments in respect of insurance claims

 

20,000,000

 


-

 


-

 

20,000,000


 

18,408,127


-

06. International Finance Corporation – Capital subscription

6,860,000

33,000


-

6,893,000


6,892,163

6,527,919

07. International Bank for Reconstruction and Development – Capital subscription

 

4,132,000

 

233,000

 


-

 

4,365,000


 

4,303,056

 

1,302,329

Division 673 – Australian Securities Commission
01. For expenditure under the Australian Securities Commission Act 1989

119,398,000

35,000


-

119,433,000


119,433,000

122,548,000

Division 674 – Companies and Securities Advisory Committee            

01. For expenditure under Part 9 of the Australian Securities Commission Act 1989

 

811,000

 


-

 


-

 

811,000


 

811,000

 

818,000

Total – Appropriations Acts
No 1 & 3

1,240,428,913

178,682,000


-

1,419,110,913


1,126,916,426

184,610,713

 

 

Act No 2

Act No 4

       
Division 976 – Capital Works and Services            
1 Australian Securities Commission            

For expenditure under the Australian Securities Commission Act 1989

5,778,000


-


-

5,778,000


5,778,000

7,249,000

Division 977 – Payments to or for the States, the Northern Territory and the Australian Capital Territory            

01. Australian Capital Territory – Special revenue assistance

34,500,000


-


-

34,500,000


34,500,000

42,200,000

02. Companies and securities regulation – Compensation for loss of revenue

 

134,376,000

 


-

 


-

 

134,376,000


 

132,550,960

 

130,335,260

04. Payments to State Governments in lieu of stamp duty on Airport sales


-

96,100,000


-

96,100,000


94,400,000


-

Division 978 – Other Services            

01. Contributions to the International Monetary Fund – Enhanced Structural Adjustment Facility

2,500,000


-


-

 

2,500,000


2,500,000


-

02. Ex gratia payment to approved charitable organisations or trust funds in memory of the Princess of Wales


-

550,000

 


-

 


-


 

-

 


-

04. Community education and information program on the tax system


-


-

250,000

250,000


57,194


-

Total – Appropriations Acts No 2&4

177,154,000

96,650

250,000

273,504,000


269,786,154

179,784,260

Note 20: Reconciliation of Agency Running Costs

 

1997-98

Actual


$

1996-97

Actual

$

Running cost appropriation spent (Div 550-1)

50,555,856

44,312,694

Less: appropriation under the FMA Act section 31

(928,913)

(1,031,971)

 

49,626,943

43,280,723

     
Add carryover 30 June

3,843,057

3,333,170

Less carryover 1 July

3,333,170

-

 

509,887

3,333,170

     
Revenue from Government (per operating statement)

50,136,830

51,524,999

Note 21: Receipts and Expenditure of the Commercial Activities, Reserved Money Funds and Special Public Money

Loan Fund

 

1997-98

Actual


$

1996-97

Actual

$

Receipts and Payments of Loan Fund    
Receipts    
Treasury Bonds

4,503,634,000

6,964,599,847

Treasury Notes

50,631,650,942

57,372,248,513

Treasury Bills – Internal

11,895,600,000

1,463,000,000

Treasury Indexed Bonds

695,727,157

770,416,201

Treasury (Adjustable Rate) Bonds

-

900,000,000

Premiums on issue of Commonwealth Securities

801,815,117

313,206,638

Total Loan Fund Receipts

68,528,427,216

67,783,471,199

Expenditure    
Financial Agreement Act 1928, Act 1929, Act 1944,
Act 1966
and Act 1976
   
Loan Flotation Expenses

121,046

136,862

Loans Redemption and Conversion Act 1921    
Treasury Notes

53,540,947,994

59,187,732,743

Australian Savings Bonds

342,400

476,780

Special Bonds

3,670

13,590

Treasury (Adjustable Rate) Bonds

3,697,602,779

-

Foreign currency redemptions

230,619,753

749,281,825

Other

318

450

Treasury Bonds

4,768,015,625

4,229,252,351

Treasury Bills - Internal

1,463,000,000

3,456,000,000

Premiums on redemptions - Treasury Bonds

301,785,571

160,500,066

Premiums on redemptions - Treasury (Adjustable Rate)
Bonds

23,434,902

-

Discount on redemptions - Foreign Currency

744,414

84,526

Total Redemptions

64,026,497,424

67,783,342,331

Total Loan Fund Expenditure

64,026,618,470

67,783,479,193

Note 21: Receipts and Expenditure of the Commercial Activities, Reserved Money Funds and Special Public Money (Continued)

Other Trust Moneys

  • Legal Authority - Financial Management and Accountability Act 1997, section 20.
  • Purpose - for the receipt of moneys temporarily held in trust for other persons.

1997-98

Budget

$

1997-98

Actual


$

1996-97

Actual

$

Balance at beginning of reporting period

13,000


13,000

13,000

Receipts

1,000


-

1,960

Expenditure

1,000


-

1,960

Balance at end of reporting period

13,000


13,000

13,000

Investment Transactions Account

1997-98

Actual


$

1996-97

Actual

$

Investment balance at beginning of reporting period

-

-

Purchase of investments

10,000

-

Realisation of investments

-

-

Invested balance at end of reporting period

10,000

-

Cash balance at end of reporting period

3,000

13,000

Investments

The balance of investments at 30 June includes the following investments held in the corporate name of the Minister for Finance and Administration pursuant to subsection 39 (1) of the Financial Management and Accountability Act 1997.

 

Rate of Interest

%

Date of Maturity

Face Value of Investment

$

Cost of

Investment

$

Internal Treasury Bills

1


30 June 1999


10,000


10,000

Note 21: Receipts and Expenditure of the Commercial Activities, Reserved Money Funds and Special Public Money (Continued)

Services for other government and non-departmental bodies

  • Legal Authority - Financial Management and Accountability Act 1997, section 20.
  • Purpose - for the payment of moneys in connection with services performed on behalf of other governments and non-departmental bodies.

1997-98

Budget

$

1997-98

Actual


$

1996-97

Actual

$

Balance at beginning of reporting period

13,301


13,301

8,065

Receipts

471,000


333,550

395,101

Expenditure

471,000


327,388

389,864

Balance at end of reporting period

13,301


19,463

13,301

Investment Transactions Account

1997-98

Actual


$

1996-97

Actual

$

Investment balance at beginning of reporting period

-

-

Purchase of investments

10,000

-

Realisation of investments

-

-

Invested balance at end of reporting period

10,000

-

Cash balance at end of reporting period

9,463

13,301

Investments

The balance of investments at 30 June includes the following investments held in the corporate name of the Minister for Finance and Administration pursuant to subsection 39 (1) of the Financial Management and Accountability Act 1997.

 

Rate of Interest

%

Date of Maturity

Face Value of Investment

$

Cost of

Investment

$

Internal Treasury Bills

1


30 June 1999


10,000


10,000

Note 21: Receipts and Expenditure of the Commercial Activities, Reserved Money Funds and Special Public Money (Continued)

Services for other government and non-departmental bodies - Australian Securities Commission

  • Legal Authority - Financial Management and Accountability Act 1997, section 60.
  • Purpose - for the payment of moneys in connection with services performed on behalf of the Australian Securities Commission.

1997-98

Budget

$

1997-98

Actual


$

1996-97

Actual

$

Balance at beginning of reporting period

157,702


157,702

352,654

Receipts

69,300,000


64,124,315

69,219,489

Expenditure

69,300,000


63,613,422

69,414,441

Balance at end of reporting period

157,702


668,595

157,702

Investment Transactions Account

1988-89

Actual


$

1997-98

Actual

$

Investment balance at beginning of reporting period

-

-

Purchase of investments

660,000

-

Realisation of investments

-

-

Invested balance at end of reporting period

660,000

-

Cash balance at end of reporting period

8,595

157,702

Investments

The balance of investments at 30 June includes the following investments held in the corporate name of the Minister for Finance and Administration pursuant to subsection 39 (1) of the Financial Management and Accountability Act 1997.

 

Rate of Interest

%

Date of Maturity

Face Value of Investment

$

Cost of

Investment

$

Internal Treasury Bills

1


30 June 1999


660,000


660,000

Note 21: Receipts and Expenditure of the Commercial Activities, Reserved Money Funds and Special Public Money (Continued)

Trustee Companies (ACT) Deposits Trust Fund.

  • Legal Authority - Financial Management and Accountability Act 1997, section 20.
  • Purpose - for the purpose of the Australian Capital Territory Ordinance in relation to Trustee Companies.

1997-98

Budget

$

1997-98

Actual


$

1996-97

Actual

$

Balance at beginning of reporting period

121,213


121,213

149,140

Receipts

-


32,993

61,875

Expenditure

-


30,415

89,802

Balance at end of reporting period

121,213


123,791

121,213

Investment Transactions Account

Invested Balance at beginning of
Reporting period

121,013


121,013

148,940

Purchase of Investment

-


32,993

50,000

Realisation of Investment

-


30,415

77,927

Invested Balance at end of
reporting period

121,013


123,591

121,013

Cash Balance at end of
reporting period

200


200

200

Investments

The balance of investments at 30 June 1998 includes the following investments held in the corporate name of the Treasurer of the Commonwealth pursuant to subsection 10 (1) of the Trustee Companies Ordinance 1947 on behalf of the Trust.

Rate of

Interest

%

Date of Maturity

Face Value of Investment

$

Cost of Investment

$

6.25

March 1999

20,000

20,874

9.5

August 2003

10,000

12,119

7.0

April 2000

20,000

19,999

10.0

October 2002

20,000

20,599

7.5

July 2005

30,000

30,000

7.5

July 2005

20,000

20,000


Total

 

120,000


123,591

 

Note 21: Receipts and Expenditure of the Commercial Activities, Reserved Money Funds and Special Public Money (Continued)

Royal Australian Mint and Coinage Trust Account

  • Legal Authority - Financial Management and Accountability Act 1997, section 21.
  • Purpose - (a) payment for goods and services and salaries, wages and other expenses incurred for the production, supply, sale and distribution of coinage, medals, dies, plaques and other like items, and for any other activity entered into by the Royal Australian Mint as approved by the Treasurer, and (b) repayment of capital funds and payment of moneys in excess of requirements to the Consolidated Revenue Fund.

1997-98

Budget

$

1997-98

Actual


$

1996-97

Actual

$

Balance at beginning of reporting period

6,028,893


6,028,893

249,885

Receipts

79,000,000


58,984,306

69,129,412

Expenses

84,000,000


64,253,958

63,350,404

Balance at end of reporting period

1,028,893


759,241

6,028,893

Investment Transactions Account

1997-98

Actual


$

1996-97

Actual

$

Investment balance at beginning of reporting period

-

-

Purchase of investments

750,000

-

Realisation of investments

-

-

Invested balance at end of reporting period

750,000

-

Cash balance at end of reporting period

9,241

6,028,893

Investments

The balance of investments at 30 June includes the following investments held in the corporate name of the Minister for Finance and Administration pursuant to subsection 39 (1) of the Financial Management and Accountability Act 1997.

 

Rate of Interest

%

Date of Maturity

Face Value of Investment

$

Cost of
Investment

$

Internal Treasury Bills

1


30 June 1999


750,000


750,000

Note 21: Receipts and Expenditure of the Commercial Activities, Reserved Money Funds and Special Public Money (Continued)

Debt Retirement Reserve Trust Account

  • Legal Authority - Financial Management and Accountability Act 1997, section 20.
  • Purpose - for the payment and receipt of moneys in accordance with the Financial Agreement Act 1994.

1997-98

Budget

$

1997-98

Actual


$

1996-97

Actual

$

Balance at beginning of reporting period

5,210,334


5,210,334

17,287,094

Receipts

761,798,000


2,045,394,033

781,714,331

Expenses

761,371,000


2,037,723,759

793,791,091

Balance at end of reporting period

5,637,334


12,880,608

5,210,334

Investment Transactions Account

1997-98

Actual


$

1996-97

Actual

$

Investment balance at beginning of reporting period

-

-

Purchase of investments

12,880,000

-

Realisation of investments

-

-

Invested balance at end of reporting period

12,880,000

-

Cash balance at end of reporting period

608

5,210,334

Investments

The balance of investments at 30 June includes the following investments held in the corporate name of the Minister for Finance and Administration pursuant to subsection 39 (1) of the Financial Management and Accountability Act 1997.

 

Rate of Interest

%

Date of Maturity

Face Value of Investment

$

Cost of
Investment

$

Internal Treasury Bills

1


30 June 1999


12,880,000


12,880,000

Note 21: Receipts and Expenditure of the Commercial Activities, Reserved Money Funds and Special Public Money (Continued)

Loan Consolidation and Investment Reserve Trust Account

  • Legal Authority - Loan Consolidation and Investment Reserve Act 1955.
  • Purpose - for repurchasing or redeeming securities which represent a portion of the public debt of the Commonwealth.

1997-98

Budget

$

1997-98

Actual

$

1996-97

Actual

$

Balance at beginning of reporting period

3,827,132,114


3,827,132,114

2,848,034,375

Receipts

1,665,987,000


8,397,988,796

1,480,113,151

Expenses

-


4,015,484

501,015,412

Balance at end of reporting period

5,493,119,114


12,221,105,426

3,827,132,114

Investment Transactions Account

1997-98

Actual

$

1996-97

Actual

$

Invested Balance at beginning of
reporting period

1,527,178,532

2,836,207,621

Purchase of Investment

12,172,225,623

1,464,546,153

Realisation of Investment

1,480,939,069

2,773,575,242

Invested Balance at end of
reporting period

12,218,465,086

1,527,178,532

Cash balance at end of reporting period

2,640,340

2,299,953,582

 

Note 21: Receipts and Expenditure of the Commercial Activities, Reserved Money Funds and Special Public Money (Continued)

Investments

The balance of investments at 30 June 1998 includes the following investments in Commonwealth Government Inscribed Stock held in the corporate name of the Treasurer of the Commonwealth pursuant to subsection 6(3) of the Loan Consolidation and Investment Reserve Act 1955.

 

Rate of Interest

%

Date of Maturity

Face Value of Investment

$

Cost of

Investment

$

Treasury Fixed Coupon Bonds        
 

13.50

15 July 98

7,030,000

7,403,416

 

14.50

15 Sep 98

1,790,000

1,920,120

 

14.00

15 April 99

5,224,000

5,862,755

 

13.00

15 Feb 00

123,588,000

143,345,181

 

13.00

15 May 00

69,167,148

80,509,261

 

7.00

15 Feb 01

23,132,700

24,129,477

 

10.00

15 Oct 02

885,000,000

1,041,068,327

 

5.25

15 July 03

27,076,600

25,374,842

 

6.50

15 July 03

1,559,200

1,606,624

 

5.40

15 May 04

10,500

8,478

 

9.00

15 Sept 04

760,000,000

889,372,140

 

7.00

15 July 05

2,000

1,927

 

10.00

15 Feb 06

1,160,000,000

1,457,336,305

     

3,063,580,148

3,677,938,853

Internal Treasury Bills        
 

1.00

30 Jun 1999

8,508,280,000

8,508,280,000

Total Australian Dollar
Denominated Securities
   

11,571,860,148


12,186,218,853

Dutch Guilder Loans*        
 

8.25

1 Nov 1999

24,987,615

20,153,174

 

7.25

1 Jan 2001

16,612,865

12,093,059

Total Foreign Currency
Denominated Securities
   

41,600,480


32,246,233

Total Investments    

11,613,460,628


12,218,465,086

*Converted at $A=NLG 1.2515

Note 22: Appropriation for Future Reporting Periods

The following table summarises appropriations for the 1998-99 financial year at 30 June 1998:

 

1998-99

$

1997-98

$

Special Appropriations

39,864,078,000

40,996,452,541

Appropriation Act No 1#

351,190,000

1,126,916,426

Appropriation Act No 2#

159,805,000

269,786,154

 

40,375,073,000

42,393,155,121

Note: Appropriations for 1997-98 include Appropriations Acts No. 3 & 4.

Note 23: Related parties transactions

The related party transactions with STOCP are as follows:

1997-98

$’000

1996-97

$’000

Sale of goods and services
-coin sales

2,080


-

Other income
-profit share

618


-

-administration fee

357


-

Expenditure paid on behalf of the STOCP has been or is to be reimbursed

1,297


-

Receivables
- coin sales

196


-

- administration fee

89


-

- reimbursable expenditure

266


-

Note 24: Payments to the Commonwealth from Business Operations

1997-98

$’000

1996-97

$’000

Seigniorage

47,434

55,754

Royalty on Numismatic Coin Sales

756

947

Rent reduction from previous year

-

385

STOCP royalty to Treasury

763

-

Loss from withdrawn circulating coin

(458)

(655)

Trust Fund surplus

321

(1,431)

Prior year adjustment to seigniorage

184

-

Actual surplus funds paid to the Commonwealth

49,000

55,000

Note 25: Executive Remuneration

The number of executive positions that received or were due to receive total remuneration of $100,000 or more:

1997-98

Number

1996-97

Number

$100,000 to $110,000

15

6

$110,001 to $120,000

14

15

$120,001 to $130,000

4

8

$130,001 to $140,000

2

3

$140,001 to $150,000

3

4

$150,001 to $160,000

1

1

$160,001 to $170,000

-

4

$180,001 to $190,000

-

1

$230,001 to $240,000

1

-

$240,001 to $250,000

-

1

$260,001 to $270,000

1

-


41

43

The aggregate amount of total remuneration of executive officers shown above.

*$5,086,764

$5,604,788

The aggregate amount of performance pay paid during the year to executive officers shown above.

-

$68,950

The aggregate amount of redundancy payments to the executive officers shown above.

$82,120

-

The definition of executive officer in the FMO effectively requires the number of qualifying positions to be reported, rather than individuals (ie individuals were not necessarily remunerated at the levels shown). This means that the remuneration for each position will reflect that of the substantive occupant and any officers who acted in the position.

Total remuneration includes
actual salary, higher duties allowance, part day travelling allowance, employer superannuation component, separation and redundancy payments and an estimate of the non-salary component of the SES package.

In light of changes to SES salary arrangements resulting from the Treasury Certified Agreement, it was decided that no payment of performance based pay would be made for the cycle payable in 1997-98.

* 1996-97 figures included overseas allowances, which are NOT included in the 1997-98 figures.

 

Note 26: Services Provided by the Auditor-General

Financial statement audit services are provided free of charge to the Department. The trust account business, Royal Australian Mint, is required to remit an amount equivalent to the cost of its audit into the Consolidated Revenue Fund. The fair value of audit services provided was:

1997-98

$

1996-97

$

Royal Australian Mint

70,000

70,000

Treasury

200,000

210,000


270,000

280,000

 

Note 27: Act of Grace Payments, Waivers and Amounts Written Off


1997-98

1996-97


$

$

No Act of Grace payments were made during the reporting period.
Amounts written off in accordance with subsection 47 (1) of the Financial Management and Accountability Act 1997:
Theft of cash advance for travel

4,279

-

Administered

Waivers
Waivers of amounts owing to the Commonwealth were made pursuant to subsection 70C(2) of the Audit Act 1901. These were amounts payable by South Australia in relation to Commonwealth advances under the States(Works and Housing) Assistance Acts and Commonwealth-State Housing Agreements.

$

 

 

 

 

328,938,649

$

19,856,910

 

Note 28: Average Staffing Levels

Average staffing levels by program and in total were as follows

1997-98

Number

1996-97

Number

Program 1: Treasury

480

523

Program 2: Royal Australian Mint

127

135

Total

607

658

Note 29: Financial Instruments Note: Departmental

(A) Terms, Conditions and Accounting Policies

Financial Instruments Accounting Policies and Methods Nature of underlying instruments
Financial Assets Financial assets are recognised when control over future economic benefits is established and the amount of the benefit can be reliably measured.  
Cash - at bank Deposits are recognised at their nominal amounts. Cash is received during day-to-day operations by the Collector of Public Money. The Department of Treasury maintains a bank account with the Reserve Bank of Australia for the administration of petty cash and for the receipt and payment of moneys. The Royal Australian Mint maintains its own commercial accounts for the conduct of its business operations.
Receivables for goods and services Receivables are carried at nominal amounts due less any provision for doubtful debts. A provision for doubtful debts is recognised when collection of the full nominal amount is no longer probable. Credit sales are normally on 30 day terms.
Investments The Royal Australian Mint and the Perth Mint have formed a partnership to market and distribute Sydney 2000 Olympic Coins. The Royal Australian Mint’s 50 per cent interest in the STOCP is carried at the lower of cost and recoverable amount. The Mint also has an investment of $750,000 in Internal Treasury Bills as at 30 June 1998. The terms of the partnership are that any annual surplus will be retained in the partnership unless unanimously agreed by the partners.
Financial Liabilities Financial liabilities are recognised when a present obligation to another party is entered into and the amount of the liability can be reliably measured.  
Trade creditors and accruals. Liabilities are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the entity. Trade liabilities are normally settled on 30 day terms.
Finance
lease liabilities
Liabilities are recognised at the present value of minimum lease payments at the beginning of the lease. Discount rates used are estimates of the interest rates implicit in the leases. 1998-99 is the final year of the lease and covers the lease of three photocopiers.

(B) Departmental Interest Rate and Credit Risk

1) Interest Rate Risk: The net fair values of cash and non-interest bearing monetary financial assets approximates their carrying value.

2) Credit Risk: The maximum exposure to credit risk at the reporting date in relation to each class of recognised financial asset is the carrying amount of those assets as indicated in the balance sheet. The Department does not have any significant exposures to any concentrations of credit risk. The maximum value of credit risk exposure does not take into account the value of any collateral or other security.

 

Note 30: Financial Instruments Note: Administered

(A) Terms, Conditions and Accounting Policies

Financial Instruments Accounting Policies and Methods Nature of underlying instruments
Financial Assets Financial assets are recognised when control over future economic benefits is established and the amount of the benefit can be reliably measured.  
Cash - at bank Deposits are recognised at their nominal amounts. The Department maintains two bank accounts with a commercial bank for the purposes of administering mortgage insurance policies written by the Housing Loans Insurance Corporation (HLIC) up to 12 December 1997 and a bank account for administering the wrap-up of the final accounts and other minor details up to the point of sale of the HLIC.
Cash - in trust accounts Deposits are recognised at their nominal amounts. The Department maintains two trust accounts within the Commonwealth Public Account. The Debt Retirement Reserve Trust Account (DRRTA) is held for the purposes of payment and receipt of moneys in relation to the redemption of Commonwealth Government Securities (CGS) on issue for the States and Territories. Interest earned is based on the RBA's Target Cash Rate and is paid monthly in arrears. Moneys are also held in the Loan Consolidation and Investment Reserve (LCIR) for the purpose of repurchase and redemption of CGS on behalf of the Commonwealth. Interest earned on the LCIR’s cash balances is included in the interest paid by the RBA to the Commonwealth on its overall cash balances.
Interest and dividends receivable Interest is credited to revenue as it accrues. Dividends from the Reserve Bank of Australia are recognised when determination is made by the Treasurer. Interest is receivable on Commonwealth Government Securities, Swaps and other loans. The basis of payment of dividends is a memorandum of understanding with the Treasurer.
Financial Instruments Accounting Policies and Methods Nature of underlying instruments
International Monetary Fund Moneys Owing Amounts owing from the International Monetary Fund are credited to revenue as they accrue. Where the IMF’s holdings of Australian dollars fall below a specified level, it pays remuneration on Australia’s average remunerated reserve tranche position. The rate of remuneration is equal to the Special Drawing Rights (SDR) interest rate (this rate is then adjusted for burden sharing). Remuneration is calculated and paid at the end of the IMF’s financial quarters.
Loans to State and Territory Governments Loans are recognised at the amounts lent. Interest is credited to revenue as it accrues. In relation to non Commonwealth Government Securities collectability of amounts outstanding is reviewed at balance date. Provision is made for bad and doubtful loans where collection of the loan or part thereof is judged to be less rather than more likely. In rare circumstances, loan repayments may be waived. Until July 1990, the Commonwealth borrowed on behalf of the State and Territory Governments and allocated a portion of the proceeds of its Treasury Fixed Coupon Bond raisings to those Governments to fund the redemption of previous allocations of Commonwealth Government Securities (CGS). The States and Territories are responsible for meeting all obligations as to interest and principal on the CGS on allocation to them in accordance with the provisions of the Financial Agreement Act 1994. In addition to the CGS, there are outstanding balances of loans raised specifically for the States. State and Territory Government loans include advances, not evidenced by the issue of securities, made for housing and specific purpose capital payments.
Financial Instruments Accounting Policies and Methods Nature of underlying instruments
Swaps Swap principal associated with cross-currency swaps is recognised on a net basis using the cost method. Interest is credited to revenue as it accrues. The notional principal associated with interest rate swaps is not recognised as assets or liabilities. The Treasury undertakes derivative transactions on behalf of the Commonwealth to assist with the management of market risk associated with the Commonwealth debt portfolio. The two main sources of market risk in respect of the Commonwealth debt portfolio are interest rate risk and exchange rate risk. The Treasury manages this market risk by manageing the Commonwealth debt portfolio to a benchmark which reflects a portfolio composition that, ex ante, can be expected to minimise the cost of Commonwealth debt over the long term, subject to an acceptable degree of volatility in annual debt service costs. Derivative transactions offer a cost-effective means of manageing the Commonwealth debt portfolio more closely in line with the benchmark than would otherwise be possible. Derivative transactions are currently limited to interest rate swaps and cross-currency swaps.
Investments - Quota International Monetary Fund The investment is recognised as a monetary asset. It is denominated in Special Drawing Rights and is valued at th
e Australian dollar equivalent. Dividend income is not earned from this investment.
The Quota represents Australia’s membership subscription to the International Monetary Fund (IMF). Each member is required to pay to the IMF the amount of its initial quota and subsequent increases partly in the member’s own currency and the remainder in the form of reserve assets. A member’s quota is not increased until the member has consented to the increase.
Investments - International Financial Institutions These investments are classified as non-monetary assets and recognised as at historical cost. Dividend income is not earned from these investments. These investments represent Australia’s membership shareholding in the Asian Development Bank, the International Bank for Reconstruction and Development, the International Finance Corporation and the European Bank for Reconstruction and Development.
Financial Liabilities Financial liabilities are recognised when a present obligation to another party is entered into and the amount of the liability can be reliably measured.  
Financial Instruments Accounting Policies and Methods Nature of underlying instruments
Grant liabilities Grants are recognised as liabilities and expensed in the year in which the grant agreements are made This represents Australia’s contribution to the Enhanced Structural Adjustment Facility (ESAF) of the IMF. The ESAF will enable the IMF to provide concessional funding to support medium term macroeconomic adjustment and structural reforms in low income members of the IMF facing protracted balance of payment problems. The ESAF will assist Australia to promote its international economic and aid interests with developing countries in the Asian region. Australia’s contribution involves $30 million to be paid in annual instalments of $2.5 million over a 12 year period.
Swaps Swap principal associated with cross-currency swaps is recognised on a net basis using the cost method. Interest expense is recognised as it accrues. The notional principal associated with interest rate swaps is not recognised as assets or liabilities. The Treasury undertakes derivative transactions on behalf of the Commonwealth to assist with the management of market risk associated with the Commonwealth debt portfolio. The two main sources of market risk in respect of the Commonwealth debt portfolio are interest rate risk and exchange rate risk. The Treasury manages this market risk by manageing the Commonwealth debt portfolio to a benchmark which reflects a portfolio composition that, ex ante, can be expected to minimise the cost of Commonwealth debt over the long term, subject to an acceptable degree of volatility in annual debt service costs. Derivative transactions offer a cost-effective means of manageing the Commonwealth debt portfolio more closely in line with the benchmark than would otherwise be possible. Derivative transactions are currently limited to interest rate swaps and cross-currency swaps.
Interest Payable Interest expense is recognised as it accrues. Interest is payable on Commonwealth Government Securities, swaps and other loans.
International Monetary Fund (IMF) Special Drawing Right (SDR) Allocation liability This liability is recognised as a monetary liability. It is valued at the Australian dollar equivalent of its liability in Special Drawing Rights. Interest expense is recognised as it accrues. The SDR allocation liability reflects the current value in Australian dollars of the Department’s liability to repay to the IMF Australia’s cumulative allocations of SDRs. Interest is payable to the IMF in relation to the amount by which Australia’s SDR holdings are below Australia’s net cumulative allocations.
Financial Instruments Accounting Policies and Methods Nature of underlying instruments
Provision for unclaimed moneys repayments A provision is recognised at a nominal value representing the expected recovery of these moneys less refunds already made, based on an analysis of historical transactions This comprises moneys which have been paid to the Commonwealth Government as unclaimed moneys in accordance with Section 69 of the Banking Act 1959. These moneys may be claimed by depositors or their legal representatives by applying to the bank concerned. Interest is not paid by the Commonwealth in relation to these moneys.
Commonwealth Government securities Debt is measured at face value. Premiums and discounts in relation to such borrowings are netted and amortised over the life of the borrowing on a straight line basis. The Department is responsible for advising the Treasurer on all aspects of debt management on behalf of the Commonwealth, including the issue of various borrowing instruments and the administration of the redemption of debt. The Department also administers the redemption of Commonwealth Government security debt on allocation to the States and Territories.
Loans - promissory notes The promissory notes are measured at nominal face value. The Department has on issue promissory notes to the International Monetary Fund (IMF), the International Bank for Reconstruction and Development (IBRD) and the Asian Development Bank (ADB). These promissory notes are in relation to undrawn paid-in capital subscriptions. Promissory notes to the value of $3,480 million do not possess established drawdown schedules. The promissory notes are non-interest bearing.

(B) Derivatives - Notional Principal Amounts

(i) Interest Rate Swap Contracts
The Department has entered into interest rate swap contracts under which it is obliged to receive and pay interest at fixed and/or floating interest rates.
As at 30 June 1998, the notional principal amounts of the interest rate swaps, which have not been recognised as assets or liabilities, and their associated maturit
y were as follows:
 

30 June 1998

 

$'000

Less than 1 year

259,501

1 - 2 years

500,000

2 - 3 years

500,000

3 - 4 years

600,000

4 - 5 years

1,750,000

5 years and over

4,350,000

 

7,959,501

(ii) Cross-Currency Swap Contracts
Swap principal and interest payable/receivable in relation to cross-currency swaps is disclosed in the financial statements on a net basis.
The gross amounts together with their carrying amounts in the financial statements are as follows:

30 June 1998


30 June 1998


Total Carrying


Gross Amount


Amount


(Cost)


$’000


$’000

Financial Assets
Swaps

26,899

11,272,792

Interest receivable - Swaps

62,120

349,665

89,019

11,622,457

Financial Liabilities
Swaps

2,761,134

14,007,028

Interest payable - Swaps

22,493

310,039

2,783,627

14,317,067

(C) Foreign Exchange Risk

The Department is open to foreign exchange risk as a result of contractual obligations in relation to:
*cross-currency swap contracts;
*promissory note liabilities in foreign denominations; and
*foreign currency loans.
The exposure to the movement in the Australian dollar has not been hedged against. As at 30 June 1998, the following foreign currency assets and liabilities were not hedged:
 

30 June 1998

 

AUD $'000

Monetary liabilities  
Current  
United States dollars

1,039,917

Pounds Sterling

1,517

Hong Kong Dollar

17,021

Japanese Yen

19,684

Swiss Francs

33

Deutsche Marks

10

Netherlands Guilders

95,885

Special Drawing Rights

7,569

 

1,181,636

   
Non-Current  
United States dollars

2,690,954

Pounds Sterling

117,646

Euro

100,000

Japanese Yen

34,819

Netherlands Guilders

127,835

Special Drawing Rights

1,019,157

 

4,090,411

Total monetary liabilities

5,272,047

   
Monetary assets  
Current  
United States dollars

3,472

Special Drawing Rights

7,411

Netherlands Guilders

3,634

 

14,517

   
Non-current  
Special Drawing Rights

5,053,498

 

5,053,498

   
Total monetary assets

5,068,015

(D) Interest Rate Exposures

The Department’s exposure to interest rate risk and the effective weighted average interest rate for each class of financial assets and financial liabilities is set out below.
Financial Instrument  

Floating Interest Rate


Fixed Interest Rate


Non-Interest Bearing


Total


Weighted Average Effective Interest

     

1 year or less


1 to 2 years


2 to 5 years


> 5 years

   

Rate

   

97-98


97-98


97-98


97-98


97-98


97-98


97-98


97-98

   

$'000


$'000


$'000


$'000


$'000


$'000


$'000


%

Financial Assets                  
                   
Cash  

8,792

-

-

-

-

2,641


11,433

4.94

                   
Interest receivable (see Note 30B)  

10,461

123,179

-

-

-

-


133,640

6.28

                   
IMF Moneys owing  

-

-

-

-

-

7,411


7,411

-

                   
Swaps (see Note 30B)  

-

3,472

-

-

23,427

-


26,899

6.62

                   
Loans to State and                  
Territory governments  

372,532

95,143

698,455

846,716

5,292,859

-


7,305,705

5.81

                   
Other receivables  

-

-

-

-

-

750


750

-

                   
Investments  

-

-

-

-

-

5,717,136


5,717,136

-

                   
Total Financial Assets (Recognised)  

391,785

221,794

698,455

846,716

5,316,286

5,727,938


13,202,974

-

Total Assets  

-

-

-

-

-

-


23,990,816

-


Financial Instrument


Floating Interest Rate


Fixed Interest Rate


Non-Interest Bearing


Total


Weighted Average Effective Interest

               

Rate

   

1 year or less


1 to 2 years


2 to 5 years


> 5 years


97-98


97-98


97-98

 

97-98


97-98


97-98


97-98


97-98


$'000


$'000


%

 

$'000


$'000


$'000


$'000


$'000

     
Financial Liabilities                
                 
Grant liabilities

-

-

-

-

-

27,500


27,500

-

                 
Swaps (see Note 30B)

2,027,279

173,610

30,220

241,500

288,525

-


2,761,134

5.78

                 
Interest payable (see Note 30B)

62,445

2,288,605

-

-

755,430

-


3,106,480

7.72

                 
IMF allocation liability

-

-

-

-

-

1,019,157


1,019,157

-

                 
Provision for unclaimed                
moneys repayments

-

-

-

-

-

41,392


41,392

-

Commonwealth                
Government securities

4,672,532

19,375,002

9,792,561

18,649,426

43,915,050

-


96,404,571

7.14

                 
Loans - promissory notes

-

-

-

-

-

3,523,963


3,523,963

-

                 
Other

-

-

-

-

-

7,569


7,569

-

Total Financial Liabilities (Recognised)

6,762,256

21,837,217

9,822,781

18,890,926

44,959,005

4,619,581


106,891,766

-

Total Liabilities

-

-

-

-

-

-


108,404,486

-

(E) Net Fair Values of Financial Assets And Liabilities

 

30 JUNE 1998

TOTAL CARRYING

AMOUNT

$'000

30 JUNE 1998

AGGREGATE NET

FAIR VALUE

$'000

Financial Assets    
Cash

11,433

11,433

Interest receivable

133,640

133,640

IMF Moneys owing

7,411

7,411

Swaps

26,899

238,209

Loans to State and    
Territory Governments

7,305,705

7,305,705

Other receivables

750

750

Investments

5,717,136

5,778,053

 

13,202,974


13,475,201

     
Financial Liabilities    
Grant liabilities

27,500

27,500

Swaps

2,761,134

2,173,947

Interest payable

3,106,480

3,106,480

IMF allocation liability

1,019,157

1,019,157

Provision for unclaimed moneys repayme
nts

41,392

41,392

Commonwealth Government Securities

96,404,571

109,744,500

Loans - promissory notes

3,523,963

3,523,964

Other

7,569

7,569

 

106,891,766


119,644,509

(F) Credit Risk Exposures

The Department’s exposure to credit risk at reporting date in relation to each class of recognised financial assets is the aggregate net fair value of those assets as indicated in Note 30 (E).

There is no credit risk exposure in relation to the notional principal associated with interest rate swaps.

The credit risk associated with Commonwealth Guarantees in respect of authorities within the Treasury Portfolio is shown in Note 16.